Song'Beverly Act Reforms ' Rebalancing Consumer Rights And OEM Responsibilities?

Since the 1970s, the Song-Beverly Consumer Warranty Act ("Song-Beverly Act" or "Act") was meant to protect consumers who buy (or lease) vehicles that may be defective. The Song-Beverly Act has seen several amendments, most recently with Assembly Bill 1755 ("AB 1755").¹ AB 1755 establishes new procedures for consumers alleging noncompliance with certain express warranties to (a) stem the recent flood in lemon law litigation, (b) streamline discovery, and (c) expedite settlements.² But the bill drew opposition from both consumer groups and original equipment manufacturers, including automobile manufacturers ("OEMs")'so much so, that by the time the bill became law, its authors had already agreed to introduce a second bill:³ Senate Bill 26 ("SB 26").⁴ This blog post gives an overview of the two amendments and relevant provisions of the Act.

Scope of the Song-Beverly Act

Generally under the Song-Beverly Act, consumers may pursue remedies against those "who make [] warranties"⁵ for alleged breach of an express warranty or implied warranty of merchantability.⁶ Before bringing an express warranty claim, a consumer must first give an OEM a reasonable opportunity to repair the vehicle. If an OEM is unable to repair the vehicle after "a reasonable number of attempts," it must offer to replace or repurchase the vehicle.⁷ Only if an OEM does not do so, then the consumer may sue. The consumer must prove (1) the nonconformity of the vehicle, (2) presentation of the vehicle to the OEM for repair, and (3) failure to repair,⁸ with remedies including restitution, replacement, cost of repairs, attorneys' fees, and if the noncompliance was "willful," civil penalties.⁹ As for implied warranty claims, consumers must prove lack of merchantability, causation, and damages, and may seek any of the same remedies.¹⁰ If they "rejected" or "revoked acceptance" of their vehicle, they may recover the price paid or payable for the vehicle in lieu of restitution or replacement.

But the Act has limits. It only covers vehicles sold (or leased) in California, express warranties issued by OEMs directly to the consumer, and implied warranties on new vehicles and used vehicles sold with a new express warranty. In other words, OEMs are not liable for sales by third-party retailers.¹¹ The Act's statute of limitations also requires a consumer to bring an implied warranty claim within four years of purchase,¹² and an express warranty claim within the warranty period, subject to statutory tolling provisions.¹³

Reforms under AB 1755

AB 1755 places certain additional requirements on actions seeking restitution or replacement of a new motor vehicle from an OEM, "distributor[]," or "warrantor" under an "applicable express warranty."¹⁴ Generally, a consumer must bring such actions within one year of the warranty's expiration date and within six years of the original date of delivery.¹⁵ The specific requirements go into effect in two waves.

The first wave establishes discovery and mediation processes for civil actions filed on or after January 1, 2025. Namely, after the defendant files an answer or other responsive pleading:

• The parties must serve initial disclosures and produce various documents relevant to the consumer's claim within 60 days;¹⁶
• The parties may take (at most...